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Unto Häkinnen - One of the best experts on this subject based on the ideXlab platform.
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Redistributive Effect progressivity and differential tax treatment personal income taxes in twelve oecd countries
Journal of Public Economics, 1999Co-Authors: Adam Wagstaff, Terkel Christiansen, Guido Citoni, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Eddy Van Doorslaer, Hattem Van Der Burg, Samuel Calonge, Unto HäkinnenAbstract:This paper decomposes the Redistributive Effect of the personal income taxes (PITs) of twelve OECD countries into four components: (i) an average rate Effect, (ii) a departure-from-proportionality or progressivity Effect, (iii) a horizontal equity Effect and (iv) a reranking Effect. The product of (i) and (ii) indicates the vertical redistribution associated with the PIT and the sum of (iii) and (iv) indicates the impact on the distribution of income of differential tax treatment. The average tax rate is found to be low in France and high in the Nordic countries, and the PIT is found to be most progressive in France, Ireland and Spain, and least progressive in Denmark and Sweden. Taking (i) and (ii) together, Denmark and the US achieve broadly similar levels of vertical Redistributive Effect. Differential treatment is found to have a much smaller Effect on income redistribution (as a proportion of Redistributive Effect) than the vertical redistribution caused by progressivity, though there are differences between countries. These differences appear to be due principally to a different emphasis on deductions, such as tax deductibility of mortgage interest payments and insurance premiums, and on local income tax.
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The Redistributive Effect of health care finance in twelve OECD countries.
Journal of health economics, 1999Co-Authors: Eddy Van Doorslaer, Adam Wagstaff, Hattem Van Der Burg, Terkel Christiansen, Guido Citoni, Rita Di Biase, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Unto HäkinnenAbstract:The OECD countries finance their health care through a mixture of taxes, social insurance contributions, private insurance premiums and out-of-pocket payments. The various payment sources have very different implications for both vertical and horizontal equity and on Redistributive Effect which is a function of both. This paper presents results on the income redistribution consequences of the health care financing mixes adopted in twelve OECD countries by decomposing the overall income Redistributive Effect into a progressivity, horizontal inequity and reranking component. The general finding of this study is that the vertical Effect is much more important than horizontal inequity and reranking in determining the overall Redistributive Effect but that their relative importance varies by source of payment. Public finance sources tend to have small positive Redistributive Effects and less differential treatment while private financing sources generally have (larger) negative Redistributive Effects which are to a substantial degree caused by differential treatment.
Adam Wagstaff - One of the best experts on this subject based on the ideXlab platform.
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Redistributive Effect progressivity and differential tax treatment personal income taxes in twelve oecd countries
Journal of Public Economics, 1999Co-Authors: Adam Wagstaff, Terkel Christiansen, Guido Citoni, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Eddy Van Doorslaer, Hattem Van Der Burg, Samuel Calonge, Unto HäkinnenAbstract:This paper decomposes the Redistributive Effect of the personal income taxes (PITs) of twelve OECD countries into four components: (i) an average rate Effect, (ii) a departure-from-proportionality or progressivity Effect, (iii) a horizontal equity Effect and (iv) a reranking Effect. The product of (i) and (ii) indicates the vertical redistribution associated with the PIT and the sum of (iii) and (iv) indicates the impact on the distribution of income of differential tax treatment. The average tax rate is found to be low in France and high in the Nordic countries, and the PIT is found to be most progressive in France, Ireland and Spain, and least progressive in Denmark and Sweden. Taking (i) and (ii) together, Denmark and the US achieve broadly similar levels of vertical Redistributive Effect. Differential treatment is found to have a much smaller Effect on income redistribution (as a proportion of Redistributive Effect) than the vertical redistribution caused by progressivity, though there are differences between countries. These differences appear to be due principally to a different emphasis on deductions, such as tax deductibility of mortgage interest payments and insurance premiums, and on local income tax.
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The Redistributive Effect of health care finance in twelve OECD countries.
Journal of health economics, 1999Co-Authors: Eddy Van Doorslaer, Adam Wagstaff, Hattem Van Der Burg, Terkel Christiansen, Guido Citoni, Rita Di Biase, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Unto HäkinnenAbstract:The OECD countries finance their health care through a mixture of taxes, social insurance contributions, private insurance premiums and out-of-pocket payments. The various payment sources have very different implications for both vertical and horizontal equity and on Redistributive Effect which is a function of both. This paper presents results on the income redistribution consequences of the health care financing mixes adopted in twelve OECD countries by decomposing the overall income Redistributive Effect into a progressivity, horizontal inequity and reranking component. The general finding of this study is that the vertical Effect is much more important than horizontal inequity and reranking in determining the overall Redistributive Effect but that their relative importance varies by source of payment. Public finance sources tend to have small positive Redistributive Effects and less differential treatment while private financing sources generally have (larger) negative Redistributive Effects which are to a substantial degree caused by differential treatment.
Achille Vernizzi - One of the best experts on this subject based on the ideXlab platform.
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Decomposing the Redistributive Effect of Taxation to Reveal Axiom Violations
2018Co-Authors: Simone Pellegrino, Achille VernizziAbstract:In this paper we propose two alternative strategies in order to decompose the Redistributive Effect of the personal income tax in the portion due to deductions, marginal tax rates and tax credits. The first one, inspired by the analysis by Lambert (2001), Pfahler (1990) and Onrubia et al. (2014), is a stepwise or "ex ante" decomposition, whilst the second strategy, inspired by the works by Podder (1993a,b) and Podder and Chatterjee (2002), is an overall and simultaneous or "ex post" decomposition. The value added of our approaches is twofold: they are very simple and intuitive, and, moreover, both of them allow to quantify the Axiom violations, as proposed by Kakwani and Lambert (1998), for each part in which the Redistributive Effect can be decomposed. We take Italy as a case study.
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some considerations on measuring the progressive principle violations and the potential equity in income tax systems
Statistics in Transition New Series, 2014Co-Authors: Edyta Mazurek, Achille VernizziAbstract:Kakwani and Lambert (1998) state three axioms which should be respected by an equitable tax system; then they propose a measurement system to evaluate at the same time the negative influences that axiom violations exert on the Redistributive Effect of taxes, and the potential equity of the tax system, which would be attained in absence of departures from equity. The authors calculate both the potential equity and the losses due to axiom violations, starting from the Kakwani (1977) progressivity index and the Kakwani (1984) decomposition of the Redistributive Effect. In this paper, we focus on the measure suggested by Kakwani and Lambert for the loss in potential equity, which is due to violations of the progressive principle: the authors’ measure is based on the tax rate re-ranking index, calculated with respect to the ranking of pre-tax income distribution. The aim of the paper is to achieve a better understanding of what Kakwani and Lambert’s measure actually represents, when it corrects the actual Kakwani progressivity index. The authors’ measure is first of all considered under its analytical aspects and then observed in different simulated tax systems. In order to better highlight its behaviour, simulations compare Kakwani and Lambert’s measure with the potential equity of a counterfactual tax distribution, which respects the progressive principle and preserves the overall tax revenue. The analysis presented in this article is performed by making use of the approach recently introduced by Pellegrino and Vernizzi (2003).
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la scomposizione dell effetto redistributivo in effetto verticale orizzontale e di riordinamento analisi della recente letteratura e verifica empirica the decomposition of the Redistributive Effect into vertical Effect horizontal Effect and reranking
2011Co-Authors: Achille Vernizzi, Simone PellegrinoAbstract:Recently van De Van, Creedy and Lambert (2001) and Urban and Lambert (2008) have reconsidered the original Aronson, Johnson and Lambert (1994) decomposition of the Redistributive Effect in order to identify the optimal bandwidth that should be used in decomposing the Redistributive Effect, when groups with close pre-tax incomes are considered. The methodology proposed by van De Van, Creedy and Lambert (2001) suggests choosing as the optimal bandwidth the one which maximizes the ratio between the potential Effect V (which depends on the bandwidth) and the actual Redistributive Effect RE (which is invariant). Urban and Lambert (2008) discuss a set of further possible decompositions of the Redistributive Effect together with a decomposition of the Atkinson-Plotnick-Kakwani index into three terms. Making use of a microsimulation model based on microdata provided by the Bank of Italy in its Survey on Households Income and Wealth in the year 2006, in this paper we investigate the three most important decompositions of the Redistributive Effect applied to the 2006 and 2007 Italian personal income tax. Moreover, we throw some more light on the behavior of these decompositions in order to look for criteria to choose a bandwidth which allows the three different definitions of potential Redistributive Effect to assume values which can be as coherent as possible, and, in the meanwhile, to catch as much as possible of the potential vertical Effect. We suggest looking for the bandwidth where the ratio between the maximum distance among the different potential vertical Effect definitions and the minimum among the different potential vertical Effects is minimum.
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the decomposition of the Redistributive Effect into vertical Effect horizontal Effect and reranking the state of the art and the application to the italian case
Politica economica, 2011Co-Authors: Simone Pellegrino, Achille VernizziAbstract:Recently van De Van, Creedy and Lambert (2001) and Urban and Lambert (2008) have reconsidered the original Aronson, Johnson and Lambert (1994) decomposition of the Redistributive Effect in order to identify the optimal bandwidth that should be used in decomposing the Redistributive Effect, when groups with close pre-tax incomes are considered. The methodology proposed by van De Van, Creedy and Lambert (2001) suggests choosing as the optimal bandwidth the one which maximizes the ratio between the potential Effect V (which depends on the bandwidth) and the actual Redistributive Effect RE (which is invariant). Urban and Lambert (2008) discuss a set of further possible decompositions of the Redistributive Effect together with a decomposition of the Atkinson-Plotnick-Kakwani index into three terms. Making use of a microsimulation model based on microdata provided by the Bank of Italy in its Survey on Households Income and Wealth in the year 2006, in this paper we investigate the three most important decompositions of the Redistributive Effect applied to the 2006 and 2007 Italian personal income tax. Moreover, we throw some more light on the behavior of these decompositions in order to look for criteria to choose a bandwidth which allows the three different definitions of potential Redistributive Effect to assume values which can be as coherent as possible, and, in the meanwhile, to catch as much as possible of the potential vertical Effect. We suggest looking for the bandwidth where the ratio between the maximum distance among the different potential vertical Effect definitions and the minimum among the different potential vertical Effects is minimum.
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The Decomposition of the Redistributive Effect and the Issue of Close Equals Identification
2010Co-Authors: Edyta Mazurek, Simone Pellegrino, Achille VernizziAbstract:Urban and Lambert (2005, 2008) present an exhaustive summary and an in-depth discussion of the literature contributions about the decomposition of the Redistributive Effect of a tax (RE). The authors discuss the indexes available in the literature for the potential vertical Effect (V), the loss due to horizontal fairness violations (H) and that due to re-rankings (R); they also introduce new indexes specifically conceived to take into account problems arising when groups of exact equals are substituted by groups of close equals. Close equals groups are generally obtained by splitting the pre-tax income distribution into contiguous intervals having the same bandwidth, so that the problem of the bandwidth choice arises. van de Van, Creedy and Lambert (2001) suggest choosing the bandwidth that maximizes the potential vertical Effect V. Even looking for V maximization, we discuss a new criterion that yields a compromise between the contrasting needs of minimizing the Effects of pre-tax within groups inequalities and the minimization of group average re-rankings. The criterion is then applied to evaluate the components of two decompositions: the former is the one suggested by Urban and Lambert (2005, 2008) as preferable, the latter is suggested by us on the basis of Urban and Lambert's paving discussion. According to our simulation results, when comparing different income tax systems for a same population as well as adopting the 'optimal' bandwidth, the new criterion seems to introduce lower approximation errors than the maximization of V.
Lorna Gross - One of the best experts on this subject based on the ideXlab platform.
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Redistributive Effect progressivity and differential tax treatment personal income taxes in twelve oecd countries
Journal of Public Economics, 1999Co-Authors: Adam Wagstaff, Terkel Christiansen, Guido Citoni, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Eddy Van Doorslaer, Hattem Van Der Burg, Samuel Calonge, Unto HäkinnenAbstract:This paper decomposes the Redistributive Effect of the personal income taxes (PITs) of twelve OECD countries into four components: (i) an average rate Effect, (ii) a departure-from-proportionality or progressivity Effect, (iii) a horizontal equity Effect and (iv) a reranking Effect. The product of (i) and (ii) indicates the vertical redistribution associated with the PIT and the sum of (iii) and (iv) indicates the impact on the distribution of income of differential tax treatment. The average tax rate is found to be low in France and high in the Nordic countries, and the PIT is found to be most progressive in France, Ireland and Spain, and least progressive in Denmark and Sweden. Taking (i) and (ii) together, Denmark and the US achieve broadly similar levels of vertical Redistributive Effect. Differential treatment is found to have a much smaller Effect on income redistribution (as a proportion of Redistributive Effect) than the vertical redistribution caused by progressivity, though there are differences between countries. These differences appear to be due principally to a different emphasis on deductions, such as tax deductibility of mortgage interest payments and insurance premiums, and on local income tax.
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The Redistributive Effect of health care finance in twelve OECD countries.
Journal of health economics, 1999Co-Authors: Eddy Van Doorslaer, Adam Wagstaff, Hattem Van Der Burg, Terkel Christiansen, Guido Citoni, Rita Di Biase, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Unto HäkinnenAbstract:The OECD countries finance their health care through a mixture of taxes, social insurance contributions, private insurance premiums and out-of-pocket payments. The various payment sources have very different implications for both vertical and horizontal equity and on Redistributive Effect which is a function of both. This paper presents results on the income redistribution consequences of the health care financing mixes adopted in twelve OECD countries by decomposing the overall income Redistributive Effect into a progressivity, horizontal inequity and reranking component. The general finding of this study is that the vertical Effect is much more important than horizontal inequity and reranking in determining the overall Redistributive Effect but that their relative importance varies by source of payment. Public finance sources tend to have small positive Redistributive Effects and less differential treatment while private financing sources generally have (larger) negative Redistributive Effects which are to a substantial degree caused by differential treatment.
Terkel Christiansen - One of the best experts on this subject based on the ideXlab platform.
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Redistributive Effect progressivity and differential tax treatment personal income taxes in twelve oecd countries
Journal of Public Economics, 1999Co-Authors: Adam Wagstaff, Terkel Christiansen, Guido Citoni, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Eddy Van Doorslaer, Hattem Van Der Burg, Samuel Calonge, Unto HäkinnenAbstract:This paper decomposes the Redistributive Effect of the personal income taxes (PITs) of twelve OECD countries into four components: (i) an average rate Effect, (ii) a departure-from-proportionality or progressivity Effect, (iii) a horizontal equity Effect and (iv) a reranking Effect. The product of (i) and (ii) indicates the vertical redistribution associated with the PIT and the sum of (iii) and (iv) indicates the impact on the distribution of income of differential tax treatment. The average tax rate is found to be low in France and high in the Nordic countries, and the PIT is found to be most progressive in France, Ireland and Spain, and least progressive in Denmark and Sweden. Taking (i) and (ii) together, Denmark and the US achieve broadly similar levels of vertical Redistributive Effect. Differential treatment is found to have a much smaller Effect on income redistribution (as a proportion of Redistributive Effect) than the vertical redistribution caused by progressivity, though there are differences between countries. These differences appear to be due principally to a different emphasis on deductions, such as tax deductibility of mortgage interest payments and insurance premiums, and on local income tax.
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The Redistributive Effect of health care finance in twelve OECD countries.
Journal of health economics, 1999Co-Authors: Eddy Van Doorslaer, Adam Wagstaff, Hattem Van Der Burg, Terkel Christiansen, Guido Citoni, Rita Di Biase, Ulf-g. Gerdtham, Michael Gerfin, Lorna Gross, Unto HäkinnenAbstract:The OECD countries finance their health care through a mixture of taxes, social insurance contributions, private insurance premiums and out-of-pocket payments. The various payment sources have very different implications for both vertical and horizontal equity and on Redistributive Effect which is a function of both. This paper presents results on the income redistribution consequences of the health care financing mixes adopted in twelve OECD countries by decomposing the overall income Redistributive Effect into a progressivity, horizontal inequity and reranking component. The general finding of this study is that the vertical Effect is much more important than horizontal inequity and reranking in determining the overall Redistributive Effect but that their relative importance varies by source of payment. Public finance sources tend to have small positive Redistributive Effects and less differential treatment while private financing sources generally have (larger) negative Redistributive Effects which are to a substantial degree caused by differential treatment.
